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Operation Of Medical Marijuana Dispensary Without Approval By City Constituted A Nuisance Per Se And Operation Could Be Enjoined Without A Showing Of Actual Harm

October 15, 2009 | Bulletin No. 925179.1

In City of Claremont v. Kruse, (--- Cal.Rptr.3d ---, Cal.App. 2 Dist., August 27, 2009), a California Court of Appeal considered whether a trial court erred when it enjoined the operation of a medical marijuana dispensary that was operating without a business license. The Court of Appeal held that the trial court did not err because the operation of the unlicensed dispensary created a nuisance per se.

UPDATE

Darrell Kruse ("Kruse") asked the City of Claremont ("City") in which area of the City he could operate a medical marijuana dispensary. A city planner told Kruse that operation of a marijuana dispensary was not permitted at any location within City and advised Kruse that he would have to seek a code amendment to open a dispensary. A few months later, Kruse submitted an application to City for a business permit and license. On his permit application, Kruse listed his proposed business as "Medical Cannabis Caregivers Collective and Information Service. Medical Marijuana Plants, Cuttings, Dried Flowers and Edibles." The application Kruse signed indicated that he acknowledged the business must comply with City's Land Use Code and Municipal Code and that completion of the application and payment of the fee did "not constitute approval of the proposed business at the location on the application."

City's planning staff concluded that Kruse's proposed use of the property at issue as a medical marijuana dispensary was not allowed under City's Land Use and Development Code ("Code") because the Code does not list a medical marijuana dispensary as a permitted use. According to the Code, if a use is not specifically listed and cannot be easily categorized as a listed use, the use is prohibited unless the Director of Community Development approves a "Finding of Similar Use." No such finding was made here.

City denied Kruse's application for a business license and permit and advised him that he could appeal the denial of his application within 10 calendar days and that he could also seek a discretionary amendment to the Code. Kruse filed a timely administrative appeal in which he asserted that an amendment to the Code is not necessary because "[a] medical marijuana caregivers collective is a legal but not conforming business anywhere in the state where it is not regulated." The same day Kruse filed his appeal, City adopted an ordinance imposing a 45-day moratorium which prevented "the approval or issuance of any permit, variance, license, or other entitlement for the establishment of a medical marijuana dispensary in the City." The City manager wrote Kruse and informed him that the moratorium rendered his appeal moot. City later extended the moratorium for two more years.

Despite City's denial of his permit application, Kruse began operating his business, which he had named Claremont All Natural Aids Buyers Information Service ("CANNABIS"). City directed Kruse to cease and desist from operating CANNABIS because he was operating the business without a license. CANNABIS stayed opened and City issued Kruse an administrative citation. Kruse was found guilty of operating the business without a license in violation of City's municipal code and fined him. Kruse subsequently disregarded City's demand to cease operating CANNABIS without a license. City issued Kruse numerous administrative citations and then filed an action against Kruse for a temporary restraining order and a preliminary and permanent injunction. The trial court ultimately found that Kruse's operation of CANNABIS without a business license constituted a nuisance per se and concluded that City is entitled to a permanent injunction for as long as the moratorium remains in effect.

Decision

On appeal, Kruse argued that the trial court erred when it concluded that the operation of CANNABIS constituted a public nuisance. Civil Code section 3479 defines a nuisance as "[a]nything which is injurious to health, including, but not limited to, the illegal sale of controlled substances, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property . . . ." A nuisance per se occurs "if a legislative body with appropriate jurisdiction in the exercise of the police power, expressly declares a particular object or substance, activity, or circumstance to be a nuisance." No proof is required beyond the fact that the injurious thing or condition exists.

Kruse contended that the operation of CANNABIS cannot be enjoined under section 3479 because there was no violation of state law. The nuisance per se finding, however, was not based on a violation of state law, but on violation of City's municipal code. The municipal code provides "that it is unlawful to transact business without first procuring a tax certificate to do so." It is undisputed that there was no business license or tax certificate for CANNABIS. Also, the code expressly prohibits any use not enumerated therein or "that cannot easily be categorized as an enumerated use." It is also undisputed that a medical marijuana dispensary is not an enumerated or permitted use. The court rejected Kruse's argument that such dispensaries could be categorized as "cigar/cigarette/smoke shops," stores which sell food, drugs, or health products, pharmacies, or counseling services.

After City dismissed Kruse's administrative appeal, the proper recourse was for Kruse to file a petition for writ of mandate. Kruse did not do so and instead continued to operate the business illegally. City's municipal code provides that a condition that exists in violation of its provisions may be abated as a public nuisance. Kruse's operation of a business without obtaining a tax certificate and business license created a nuisance per se. No showing of harm was required to establish a nuisance per se. Therefore, the operation of the medical marijuana dispensary could be enjoined.

Kruse also contended that the Compassionate Use Act ("CUA") and the Medical Marijuana Program Act ("MMPA") preempt City's actions of (1) enacting a moratorium on medical marijuana dispensaries, and (2) denying his application for a business permit and license to operate such a dispensary. The CUA, which was approved by California voters in 1996, provides a limited defense for patients and primary caregivers from prosecution for cultivation and possession of marijuana. The court found that the CUA does not expressly preempt City's actions in regard to Kruse and CANNABIS. The plain language of the CUA does not authorize the operation of medical marijuana dispensaries or prohibit local governments from regulating such dispensaries. Nothing in the history of the CUA or in the CUA's text suggests that the Legislature intended for the act to address local land use or business licensing issues.

The MMPA was passed by the California Legislature to clarify the scope of the CUA. The MMPA, among other things, creates a program to issue identification cards to qualified patients and caregivers and immunize them from prosecution of certain conduct relating to the provision of medical marijuana. The MMPA also does not expressly preempt City's actions in regard to Kruse's medical marijuana dispensary. The text and history of the MMPA does not mention medical marijuana dispensaries. Also, the MMPA expressly allows local regulation and provides that its provisions shall not "prevent a city or other local governing body from adopting and enforcing laws" that are consistent with the MMPA.

The court concluded that neither the CUA nor the MMPA impliedly preempt City's actions because "[n]either statute addresses, much less completely covers the areas of land use, zoning and business licensing." Also, neither the CUA nor the MMPA compel local governing bodies to accommodate medical marijuana dispensaries.

The court also concluded that City's moratorium does not purport to address the conflict between California and federal law regarding the legality of medical marijuana. When it enacted the moratorium, City merely acknowledged the conflict between the laws and expressed its desire to study the impact of medical marijuana dispensaries.

Government Code section 65858 authorizes a city "to adopt as an urgency measure an interim ordinance" that prohibits a use that is in conflict with local law and which the city "is considering or studying or intends to study within a reasonable time." The court found that City's temporary moratorium in this case came within the scope of authority granted by section 65858.

The court found City could properly dismiss Kruse's appeal from the denial of his application. At the time City enacted the moratorium, Kruse's application had already been denied. Kruse did not incur substantial expenses prior to the denial of his application. Neither the issuance of the injunction by the trial court nor City's dismissal of Kruse's appeal denied him of any vested right. Kruse had no vested right to operate CANNABIS because the operation of the medical marijuana dispensary was not lawful.

Finally, the court found that the scope of the injunction was not overbroad. The injunction is limited in time to the duration of the moratorium and does not bar Kruse from operating a dispensary under future zoning regulations. Accordingly, the Court of Appeal affirmed the trial court's ruling.

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